Loyalty Ventures Inc. (Nasdaq: LYLT), a leading provider of
tech-enabled, data-driven consumer loyalty solutions today
announced financial results for the fourth quarter and full year
ended December 31, 2021.
Commenting on the results, Charles Horn, Chief Executive Officer
said, “Fourth quarter operating performance demonstrated the
resilience of our business model in the face of continued
COVID-related headwinds. Both the AIR MILES® Reward Program and
BrandLoyalty posted double-digit adjusted EBITDA growth on
lower-than-anticipated revenues due to improved margins and lower
overhead costs for the quarter, exclusive of strategic transaction
costs and a goodwill impairment. In the AIR MILES Reward Program,
redemptions in the fourth quarter were up year-over-year but were
constrained by the Omicron variant whose impact emerged midway
through the quarter. Similarly, activity at BrandLoyalty increased
from fourth quarter 2020 levels, but fell off in the latter part of
the quarter due to pandemic-related supply chain and lockdown
disruptions. Within this dynamic business environment, which
defined much of 2021, we maintained a stable adjusted EBITDA margin
of 22.6% and generated net cash from operating activities of $180
million that produced free cash flow of $161 million for the year.
As a strong cash flow generator, we have the financial flexibility
to invest in our business while deleveraging.
“As a result of the ongoing impact of the COVID-19 pandemic, we
determined that it was more likely than not that the fair value of
the BrandLoyalty reporting unit was below its carrying value, and
performed an interim impairment test in connection with the
preparation of our annual financial statements. Based on the
preliminary results, we recognized a non-cash, goodwill impairment
charge of $50 million.
“As a newly independent company following the separation from
our former parent on November 5, 2021, Loyalty Ventures exited 2021
with two market-leading businesses, each with significant growth
potential that we plan to develop through a combination of organic
investments and tuck-in acquisitions. We will deploy our resources
in 2022 to expand our analytics, accelerate digital platform
upgrades, enhance rewards in our AIR MILES Reward Program and
broaden our sourcing options and product portfolio at
BrandLoyalty—all efforts designed to strengthen our value
proposition for sponsors, clients, and loyalty program participants
and build on our capabilities to support future growth.
“I want to recognize the hard work and dedication of the teams
at both the AIR MILES Reward Program and BrandLoyalty, who have
navigated challenging business conditions over the last two years,
while managing relationships with our sponsors, collectors,
consumers, clients, and partners. Their efforts, together with
those of our corporate leadership and staff, have been critical to
our ability to establish Loyalty Ventures as an independent,
publicly-traded company, ready to pursue the substantial long-term
growth opportunities on the horizon.”
Fourth Quarter and Full Year 2021 Consolidated and
Combined Financial Results
Total revenue for the fourth quarter was $239 million, above the
$231 million recorded in the fourth quarter of 2020. Adjusted
EBITDA increased from $41 million in the fourth quarter of 2020 to
$47 million in the fourth quarter of 2021. The net loss of $56
million, or $2.27 per diluted share includes $64 million of
goodwill impairment and strategic transaction costs, net of tax,
related to the separation.
For full year 2021, total revenue was $735 million compared to
$765 million in 2020. Adjusted EBITDA was $166 million compared to
adjusted EBITDA of $173 million for 2020. Net income for 2021 was
$2 million, or $0.07 per diluted share inclusive of the costs
associated with the goodwill impairment and the separation.
Fourth Quarter Segment Financial Results
AIR MILES Reward Program: Revenue increased 1%
to $71 million, compared to $70 million in the fourth quarter of
2020, primarily due to a favorable exchange rate and an increase in
revenues related to marketing services, offset in part by lower
brand revenues stemming from a 7% decline in AIR MILES reward miles
issued. Adjusted EBITDA increased 13% to $34 million, compared to
the fourth quarter of 2020, mostly due to operating expense
savings, exclusive of strategic transaction costs.
The decline in AIR MILES reward miles issuance relates to the
non-renewal of two sponsors and their exit from the program in the
first quarter of 2021. AIR MILES reward miles redeemed increased
28% compared to the fourth quarter of 2020, reflecting continued
strength in the merchandise category and positive momentum early in
the quarter for travel bookings, before the emergence of the
Omicron variant in November 2021. On a sequential basis, AIR MILES
reward miles issued and redeemed improved 9% and 20%, respectively,
reflecting the impact of the holiday shopping season in the fourth
quarter of 2021.
BrandLoyalty: Revenue increased 4% to $168
million, compared to $161 million in the fourth quarter of 2020, as
a result of positive campaign performance in key European and Asian
markets. Adjusted EBITDA increased 18% to $17 million, compared to
the fourth quarter of 2020, reflecting the impact of the higher
revenues and improved margin for certain programs as well as
overhead savings, exclusive of strategic transaction costs and the
goodwill impairment.
Recent Developments
- After market close on November 5, 2021, Loyalty Ventures
completed its separation from its former parent company and began
regular-way trading on the Nasdaq Global Select Market on November
8, 2021. The separation was achieved through the distribution by
the former parent of 81% of our outstanding shares to holders of
the former parent’s common stock on the record date of October 27,
2021, at a ratio of one share of Loyalty Ventures common stock for
every two and one-half shares of the former parent’s common
stock.
- The launch of a new AIR MILES Reward Program Flight platform in
November provides collectors with a significantly improved booking
experience and additional payment options, together with program
enhancements.
- BrandLoyalty continued its exclusive partnership with The Walt
Disney Company in key regions, making it the only company in its
industry partnering with Disney to offer campaigns featuring
Disney-branded products.
Outlook
“Loyalty Ventures enters 2022 with a commitment to build upon
the leadership positions of our AIR MILES Reward Program and
BrandLoyalty segments to ensure long-term sustainable growth in the
periods ahead. Underpinning our full year 2022 guidance for
revenues of $775 million to $800 million are expectations for a
significant pick-up in BrandLoyalty campaign-based programs which
is expected to offset lower net revenues at the AIR MILES Reward
Program due to higher redemption costs related to program
enhancements. Adjusted EBITDA is expected to range from $150
million to $158 million, equivalent to a margin of approximately
20% at the midpoint, inclusive of additional operating expenses
associated with priority spending initiatives to drive accelerated
growth in 2023. We expect AIR MILES to produce relatively stable
results throughout the year, with BrandLoyalty posting its
strongest results in the second and fourth quarters of 2022.
“Our business is dedicated to deepening the connections between
our clients and their customers, and we are confident that Loyalty
Ventures is positioned to grow and prosper. Our established
businesses have significant runway to expand beyond their current
size, robust data platforms, a roster of marquee clients to which
we can offer a broadened array of services, a solid financial
position, and most importantly, a seasoned and motivated team
around the world that is committed to value creation for all of our
stakeholders,” Mr. Horn concluded.
Fourth Quarter and Full Year 2021 Conference Call and
Webcast Information
Loyalty Ventures Inc. will hold a conference call to discuss its
results and business outlook at 4 p.m. CT on Thursday, February 3,
2022. The live webcast of the conference call can be accessed here.
The webcast replay will be available on the Company’s investor
relations website for up to one year.
About Loyalty Ventures Inc.Loyalty Ventures
Inc. (Nasdaq: LYLT), an S&P SmallCap 600 company, is a leading
provider of tech-enabled, data-driven consumer loyalty solutions.
Our solutions are focused on helping partners achieve their
strategic and financial objectives, from increased consumer basket
size, shopper traffic and frequency and digital reach to enhanced
program reporting and analytics.
We help financial services providers, retailers and other
consumer-facing businesses create and increase customer loyalty
across multiple touch points from traditional to digital to mobile
and emerging technologies. We own and operate the AIR MILES® Reward
Program, Canada’s most recognized loyalty program, and
BrandLoyalty, a leading global provider of campaign-based loyalty
solutions for grocers and other high-frequency retailers.
The AIR MILES Reward Program is Canada’s most recognized loyalty
program with approximately two-thirds of all Canadian households
participating. AIR MILES collectors earn AIR MILES at more than 300
leading Canadian, global and online brands and at thousands of
retail and service locations across the country. This activity
powers an unmatched data asset which along with world-class
analytics and marketing capabilities, enables clients to accelerate
their marketing activities and ROI. It is the only loyalty program
of its kind to give collectors the flexibility and choice to use
AIR MILES on aspirational rewards such as merchandise, travel,
events or attractions or, instantly, in-store or online, through
AIR MILES Cash at participating Partner locations. For more
information, visit: airmiles.ca. To celebrate collectors and the
issuance of its 100 Billionth Mile, AIR MILES is inviting Canadians
to visit the Program on Facebook, Instagram and Twitter.
BrandLoyalty is a leading global provider of campaign-based
loyalty solutions for grocers and other high-frequency retailers.
BrandLoyalty changes shopper behavior on a mass scale – both
emotionally and transactionally – through its innovative and
digitally-enhanced loyalty solutions. With over 25 years of loyalty
experience, BrandLoyalty fully supports the retailer’s journey,
from strategy to solution and execution. After defining the
retailer’s objectives and campaign KPIs, BrandLoyalty designs the
ideal solution, including the mechanic, reward and campaign.
Inspired by its purpose ‘Next generation happiness,’ BrandLoyalty’s
goal is to maximize the impact for its clients and minimize the
impact on our planet—making people happy and business better.
Find out more via brandloyalty.com or on LinkedIn and
YouTube.
More information about Loyalty Ventures can be found at
loyaltyventures.com.
Caution Regarding Forward-Looking
StatementsThis release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements give our expectations or
forecasts of future events and can generally be identified by the
use of words such as “believe,” “expect,” “anticipate,” “estimate,”
“intend,” “project,” “plan,” “likely,” “may,” “should” or other
words or phrases of similar import. Similarly, statements that
describe our business strategy, outlook, objectives, plans,
intentions or goals also are forward-looking statements. Examples
of forward-looking statements include, but are not limited to,
statements we make regarding, and the guidance we give with respect
to, our anticipated operating or financial results, including
revenues, adjusted EBITDA and adjusted EBITDA margins for 2022 and
the assumptions related thereto; the preliminary results of our
interim impairment test and the related goodwill impairment charge;
our significant growth potential, including through organic
investments and/or tuck-in acquisitions; our plans to deploy
resources in 2022; our ability to grow our business; and the impact
of future economic conditions, including, but not limited to,
fluctuation in currency exchange rates, market conditions and
COVID-19 impacts related to reduction in demand from clients,
supply chain disruption with respect to our rewards, disruptions in
the airline or travel industries and labor shortages due to
quarantine.
We believe that our expectations are based on reasonable
assumptions. Forward-looking statements, however, are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from the projections, anticipated results or
other expectations expressed in this release, and no assurances can
be given that our expectations will prove to have been correct.
These risks and uncertainties include, but are not limited to, that
actual results may differ materially from the preliminary results
of our interim impairment test upon the completion of our
procedures with respect to our annual financial statements and
filing of our annual report on Form 10-K and the factors set forth
in the Risk Factors section of both (1) our Registration Statement
on Form 10-12B; and (2) any updates in Item 1A, or elsewhere, in
our Quarterly Reports on Form 10-Q filed for periods subsequent to
such Registration Statement or our Form 10-K for the most recently
ended fiscal year when filed or any updates thereto. Our
forward-looking statements speak only as of the date made, and we
undertake no obligation, other than as required by applicable law,
to update or revise any forward-looking statements, whether as a
result of new information, subsequent events, anticipated or
unanticipated circumstances or otherwise.
Financial MeasuresIn addition to the results
presented in accordance with generally accepted accounting
principles, or GAAP, the Company may present financial measures
that are non-GAAP measures, adjusted EBITDA, adjusted EBITDA
margin, and free cash flow. The Company believes that these
non-GAAP financial measures, viewed in addition to and not in lieu
of the Company’s reported GAAP results, provide useful information
to investors regarding the Company’s performance, liquidity and
overall results of operations. The Company uses adjusted EBITDA as
an integral part of internal reporting to measure the performance
and operational strength of reportable segments and to evaluate the
performance of senior management. Adjusted EBITDA eliminates the
uneven effect across all reportable segments of non-cash
depreciation of tangible assets and amortization of intangible
assets, including certain intangible assets that were recognized in
business combinations, and the non-cash effect of stock
compensation expense. In addition, adjusted EBITDA eliminates the
effect of the gain (loss) on the sale of a business, goodwill
impairment, strategic transaction costs, including costs related to
the separation, and restructuring and other charges. Adjusted
EBITDA margin represents adjusted EBITDA divided by revenue. Free
cash flow represents cash flow from operations less capital
expenditures. Free cash flow is a liquidity measure used by
management to evaluate the amount of cash available for debt
repayment, acquisition opportunities, and other corporate
purposes.
Reconciliation of Non-GAAP Financial
MeasuresReconciliations to the most directly comparable
GAAP financial measures are available in the accompanying
schedules, which are posted as part of this earnings release in
both the Press Releases and Investor Relations sections on the
Company’s website (www.loyaltyventures.com). No reconciliation is
provided with respect to forward looking annual guidance as we
cannot reliably predict all necessary components or their impact to
reconcile these non-GAAP measures without unreasonable effort. The
events necessitating a non-GAAP adjustment are inherently
unpredictable and may have a material impact on the Company’s
future results.
The financial measures presented are consistent with the
Company’s historical financial reporting practices. The non-GAAP
financial measures presented herein may not be comparable to
similarly titled measures presented by other companies and are not
identical to corresponding measures used in other various
agreements or public filings.
Investor Contact:Lynn MorgenADVISIRY
PARTNERS lynn.morgen@advisiry.com+1.212.750.5800
LOYALTY VENTURES
INC.CONSOLIDATED AND COMBINED STATEMENTS OF
INCOME(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(in thousands, except per share amounts) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Redemption, net |
|
$ |
163,551 |
|
|
$ |
154,447 |
|
|
$ |
444,395 |
|
|
$ |
473,067 |
|
Services |
|
|
69,829 |
|
|
|
70,194 |
|
|
|
269,073 |
|
|
|
264,050 |
|
Other |
|
|
5,211 |
|
|
|
6,233 |
|
|
|
21,839 |
|
|
|
27,689 |
|
Total revenue |
|
|
238,591 |
|
|
|
230,874 |
|
|
|
735,307 |
|
|
|
764,806 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of operations (exclusive of depreciation and amortization
disclosed separately below) |
|
|
200,426 |
|
|
|
188,096 |
|
|
|
573,246 |
|
|
|
587,615 |
|
General and administrative |
|
|
8,403 |
|
|
|
3,522 |
|
|
|
20,011 |
|
|
|
14,315 |
|
Depreciation and other amortization |
|
|
8,707 |
|
|
|
8,299 |
|
|
|
34,944 |
|
|
|
28,988 |
|
Amortization of purchased intangibles |
|
|
424 |
|
|
|
12,785 |
|
|
|
1,740 |
|
|
|
48,953 |
|
Goodwill impairment |
|
|
50,000 |
|
|
|
— |
|
|
|
50,000 |
|
|
|
— |
|
Total operating expenses |
|
|
267,960 |
|
|
|
212,702 |
|
|
|
679,941 |
|
|
|
679,871 |
|
Operating (loss) income |
|
|
(29,369 |
) |
|
|
18,172 |
|
|
|
55,366 |
|
|
|
84,935 |
|
Gain on sale of a
business |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,876 |
) |
Interest expense (income),
net |
|
|
5,852 |
|
|
|
(318 |
) |
|
|
5,534 |
|
|
|
(834 |
) |
(Loss) income before income
taxes and loss (income) from investment in unconsolidated
subsidiaries |
|
|
(35,221 |
) |
|
|
18,490 |
|
|
|
49,832 |
|
|
|
96,645 |
|
Provision for income
taxes |
|
|
20,559 |
|
|
|
3,941 |
|
|
|
52,175 |
|
|
|
21,324 |
|
Loss (income) from investment
in unconsolidated subsidiaries – related party, net of tax |
|
|
— |
|
|
|
40 |
|
|
|
(4,067 |
) |
|
|
246 |
|
Net (loss) income |
|
$ |
(55,780 |
) |
|
$ |
14,509 |
|
|
$ |
1,724 |
|
|
$ |
75,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.27 |
) |
|
$ |
0.59 |
|
|
$ |
0.07 |
|
|
$ |
3.05 |
|
Diluted |
|
$ |
(2.27 |
) |
|
$ |
0.59 |
|
|
$ |
0.07 |
|
|
$ |
3.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
24,585 |
|
|
|
24,585 |
|
|
|
24,585 |
|
|
|
24,585 |
|
Diluted |
|
|
24,591 |
|
|
|
24,585 |
|
|
|
24,591 |
|
|
|
24,585 |
|
LOYALTY VENTURES
INC.CONSOLIDATED AND COMBINED BALANCE
SHEETS(Unaudited)
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2021 |
|
2020 |
|
|
(in thousands, except per share amounts) |
ASSETS |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
167,601 |
|
|
$ |
278,841 |
|
Accounts receivable, net |
|
|
288,251 |
|
|
|
270,559 |
|
Inventories, net |
|
|
188,577 |
|
|
|
164,306 |
|
Redemption settlement assets,
restricted |
|
|
735,131 |
|
|
|
693,461 |
|
Other current assets |
|
|
28,627 |
|
|
|
23,000 |
|
Total current assets |
|
|
1,408,187 |
|
|
|
1,430,167 |
|
Property and equipment,
net |
|
|
79,959 |
|
|
|
97,916 |
|
Right of use assets -
operating |
|
|
99,515 |
|
|
|
113,870 |
|
Deferred tax asset, net |
|
|
58,128 |
|
|
|
70,137 |
|
Intangible assets, net |
|
|
3,095 |
|
|
|
5,097 |
|
Goodwill |
|
|
649,958 |
|
|
|
735,898 |
|
Investment in unconsolidated
subsidiary – related party |
|
|
— |
|
|
|
854 |
|
Other non-current assets |
|
|
24,885 |
|
|
|
4,125 |
|
Total assets |
|
$ |
2,323,727 |
|
|
$ |
2,458,064 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
103,482 |
|
|
$ |
74,818 |
|
Accrued expenses |
|
|
144,997 |
|
|
|
67,056 |
|
Deferred revenue |
|
|
924,789 |
|
|
|
898,475 |
|
Current operating lease
liabilities |
|
|
10,055 |
|
|
|
9,942 |
|
Current debt |
|
|
50,625 |
|
|
|
— |
|
Other current liabilities |
|
|
118,444 |
|
|
|
64,990 |
|
Total current liabilities |
|
|
1,352,392 |
|
|
|
1,115,281 |
|
Deferred revenue |
|
|
97,167 |
|
|
|
105,544 |
|
Long-term operating lease
liabilities |
|
|
103,242 |
|
|
|
117,648 |
|
Long-term debt |
|
|
603,488 |
|
|
|
— |
|
Other liabilities |
|
|
20,874 |
|
|
|
25,290 |
|
Total liabilities |
|
|
2,177,163 |
|
|
|
1,363,763 |
|
Common stock, $0.01 par value;
authorized, 200,000 shares; issued, 24,585 shares at December 31,
2021 |
|
|
246 |
|
|
|
— |
|
Additional
paid-in-capital |
|
|
266,775 |
|
|
|
— |
|
Accumulated deficit |
|
|
(55,383 |
) |
|
|
— |
|
Parent’s net investment |
|
|
— |
|
|
|
1,093,920 |
|
Accumulated other
comprehensive (loss) income |
|
|
(65,074 |
) |
|
|
381 |
|
Total equity |
|
|
146,564 |
|
|
|
1,094,301 |
|
Total liabilities and
equity |
|
$ |
2,323,727 |
|
|
$ |
2,458,064 |
|
LOYALTY VENTURES
INC.CONDENSED CONSOLIDATED AND COMBINED STATEMENTS
OF CASH FLOWS(Unaudited)
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
2021 |
|
2020 |
|
|
(in thousands) |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
$ |
1,724 |
|
|
$ |
75,075 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
36,684 |
|
|
|
77,941 |
|
Deferred income tax expense (benefit) |
|
|
8,763 |
|
|
|
(3,502 |
) |
Non-cash stock compensation |
|
|
6,259 |
|
|
|
7,017 |
|
Loss from investments in unconsolidated subsidiaries – related
party |
|
|
60 |
|
|
|
246 |
|
Gain on sale of investment in unconsolidated subsidiary – related
party |
|
|
(4,110 |
) |
|
|
— |
|
Gain on sale of a business |
|
|
— |
|
|
|
(10,876 |
) |
Goodwill impairment |
|
|
50,000 |
|
|
|
— |
|
Change in other operating
assets and liabilities, net of sale of business |
|
|
61,753 |
|
|
|
76,881 |
|
Other |
|
|
18,443 |
|
|
|
(6,465 |
) |
Net cash provided by operating activities |
|
|
179,576 |
|
|
|
216,317 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Change in redemption
settlement assets, restricted |
|
|
(51,924 |
) |
|
|
(40,677 |
) |
Capital expenditures |
|
|
(18,213 |
) |
|
|
(24,319 |
) |
Proceeds from the sale of
investment in unconsolidated subsidiary – related party |
|
|
4,055 |
|
|
|
— |
|
Investments in unconsolidated
subsidiaries – related party |
|
|
— |
|
|
|
(736 |
) |
Distributions from investment
in unconsolidated subsidiary – related party |
|
|
795 |
|
|
|
— |
|
Net cash used in investing activities |
|
|
(65,287 |
) |
|
|
(65,732 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Borrowings under debt
agreements |
|
|
675,000 |
|
|
|
— |
|
Payment of deferred financing
costs |
|
|
(22,852 |
) |
|
|
— |
|
Contribution from Parent |
|
|
5,637 |
|
|
|
— |
|
Consideration paid to Parent
in connection with Separation |
|
|
(750,000 |
) |
|
|
— |
|
Dividends paid to Parent |
|
|
(120,000 |
) |
|
|
— |
|
Net transfers to Parent |
|
|
(3,972 |
) |
|
|
(2,638 |
) |
Net cash used in financing activities |
|
|
(216,187 |
) |
|
|
(2,638 |
) |
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
(3,025 |
) |
|
|
14,446 |
|
|
|
|
|
|
|
|
Change in cash, cash
equivalents and restricted cash |
|
|
(104,923 |
) |
|
|
162,393 |
|
Cash, cash equivalents and
restricted cash at beginning of year |
|
|
337,525 |
|
|
|
175,132 |
|
Cash, cash equivalents and restricted cash at end of year |
|
$ |
232,602 |
|
|
$ |
337,525 |
|
LOYALTY VENTURES
INC.SUMMARY OF FINANCIAL
HIGHLIGHTS(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2021 |
|
2020 |
|
% Change |
|
|
2021 |
|
2020 |
|
% Change |
|
|
|
(in thousands, except percentages) |
|
Segment
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR MILES Reward Program |
|
$ |
70,621 |
|
|
$ |
69,770 |
|
|
1 |
|
% |
|
$ |
284,744 |
|
|
$ |
277,121 |
|
|
3 |
|
% |
BrandLoyalty |
|
|
168,016 |
|
|
|
161,104 |
|
|
4 |
|
|
|
|
450,609 |
|
|
|
487,685 |
|
|
(8 |
) |
|
Corporate/Other |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
Eliminations |
|
|
(46 |
) |
|
|
— |
|
|
nm* |
|
|
|
|
(46 |
) |
|
|
— |
|
|
nm* |
|
|
Total |
|
$ |
238,591 |
|
|
$ |
230,874 |
|
|
3 |
|
% |
|
$ |
735,307 |
|
|
$ |
764,806 |
|
|
(4 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR MILES Reward Program |
|
$ |
34,113 |
|
|
$ |
30,079 |
|
|
13 |
|
% |
|
$ |
147,798 |
|
|
$ |
144,025 |
|
|
3 |
|
% |
BrandLoyalty |
|
|
16,892 |
|
|
|
14,263 |
|
|
18 |
|
|
|
|
32,112 |
|
|
|
42,161 |
|
|
(24 |
) |
|
Corporate/Other |
|
|
(3,624 |
) |
|
|
(3,193 |
) |
|
13 |
|
|
|
|
(13,919 |
) |
|
|
(12,796 |
) |
|
9 |
|
|
Total |
|
$ |
47,381 |
|
|
$ |
41,149 |
|
|
15 |
|
% |
|
$ |
165,991 |
|
|
$ |
173,390 |
|
|
(4 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Indicators (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AIR MILES reward miles issued |
|
|
1,264.2 |
|
|
|
1,355.2 |
|
|
(7 |
) |
% |
|
|
4,670.2 |
|
|
|
4,963.8 |
|
|
(6 |
) |
% |
AIR MILES reward miles redeemed |
|
|
1,071.8 |
|
|
|
838.4 |
|
|
28 |
|
% |
|
|
3,507.3 |
|
|
|
3,127.8 |
|
|
12 |
|
% |
* not meaningful
LOYALTY VENTURES
INC.RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(in thousands) |
Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(55,780 |
) |
|
$ |
14,509 |
|
|
$ |
1,724 |
|
|
$ |
75,075 |
|
Loss (income) from investment in unconsolidated subsidiaries –
related party, net of tax |
|
|
— |
|
|
|
40 |
|
|
|
(4,067 |
) |
|
|
246 |
|
Provision for income taxes |
|
|
20,559 |
|
|
|
3,941 |
|
|
|
52,175 |
|
|
|
21,324 |
|
Interest expense (income), net |
|
|
5,852 |
|
|
|
(318 |
) |
|
|
5,534 |
|
|
|
(834 |
) |
Depreciation and other amortization |
|
|
8,707 |
|
|
|
8,299 |
|
|
|
34,944 |
|
|
|
28,988 |
|
Amortization of purchased intangibles |
|
|
424 |
|
|
|
12,785 |
|
|
|
1,740 |
|
|
|
48,953 |
|
Stock compensation expense |
|
|
(63 |
) |
|
|
1,833 |
|
|
|
6,259 |
|
|
|
7,017 |
|
Gain on sale of a business, net of strategic transaction costs
(1) |
|
|
— |
|
|
|
(25 |
) |
|
|
— |
|
|
|
(7,816 |
) |
Goodwill impairment |
|
|
50,000 |
|
|
|
— |
|
|
|
50,000 |
|
|
|
— |
|
Strategic transaction costs (2) |
|
|
17,682 |
|
|
|
100 |
|
|
|
17,682 |
|
|
|
329 |
|
Restructuring and other charges |
|
|
— |
|
|
|
(15 |
) |
|
|
— |
|
|
|
108 |
|
Adjusted EBITDA |
|
$ |
47,381 |
|
|
$ |
41,149 |
|
|
$ |
165,991 |
|
|
$ |
173,390 |
|
(1) |
Represents
gain on sale of Precima in January 2020, net of strategic
transaction costs. Precima was included in our AIR MILES Reward
Program segment. |
(2) |
Represents costs associated with strategic initiatives,
including costs associated with the separation, which were
comprised of consent fees, amounts associated with the employee and
tax matters agreements and professional services. |
|
|
Year Ended |
|
|
December 31, |
|
|
2021 |
|
2020 |
|
|
|
(in thousands) |
Free cash
flow: |
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
179,576 |
|
|
$ |
216,317 |
|
Capital expenditures |
|
|
(18,213 |
) |
|
|
(24,319 |
) |
Free cash flow |
|
$ |
161,363 |
|
|
$ |
191,998 |
|
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